I think this is another example of how convoluted the tax code is, easily subject to multiple interpretations of the same issue.
It seems to me to be rather clear in IRS Publication 523, and this thread could be interpreted as you looking for the answer you like, as opposed to the answer that is correct. No such accusation intended here. Just a caution to make you aware is all.
What is correct may depend on if you are "in the business" of building and selling properties.
